A consortium led by Hong Kong business magnate Li Ka-shing's Cheung Kong Infrastructure Holdings has agreed to buy a Dutch waste management company, as the richest man in Asia expands his presence in the European infrastructure and utility business.
Li's Cheung Kong Infrastructure Holdings (CKI)-led consortium has offered HK$9.7bn (US$1.25bn/£796m) for the Netherlands's largest waste processor AVR Afvalverwerking BV (AVR).
In January, CKI had invested HK$3.2bn in New Zealand's Envirowaste, its first investment in waste management this year. The acquisition gave CKI ownership of landfill sites, recycling depots and technology that captures methane gas for power generation in New Zealand.
The consortium includes Li's flagship company Cheung Kong Holdings Limited, Cheung Kong subsidiary Power Assets Holdings and the Li Ka Shing Foundation. CKI and Cheung Kong Holdings both have a 35% share in the investment, while Power Assets and the Li Ka Shing Foundation have 20% and 10%, respectively.
"The acquisition of AVR will see us investing in a leading waste management company in Europe, possessing the largest energy-from-waste plant capacity in the continent," Kam Hing-lam, Group Managing Director of CKI, said in a statement.
"It fits in well with CKI's stringent investment requirements, generating immediate recurring cash flow with profitable and stable returns."
AVR has a 23% market share in the Netherlands' waste management industry and has stable revenue streams from long-term contracts as well as from generated energy, according to the statement.
With an estimated net worth of $31bn, the 85-year-old Li was ranked as the eighth wealthiest person in the world by Forbes. He has been expanding his presence in North America, Europe and Australia through CKI, which is helmed by his eldest son Victor, the heir to his Cheung Kong conglomerate.
In 2011, CKI acquired Northumbrian Water Group, one of Britain's biggest water utilities, in a deal worth nearly $4bn.
Li's conglomerate Hutchison Whampoa earlier said in March that its European businesses had boosted its full-year underlying profit. Europe made up 34% of Hutchison Whampoa's full-year earnings before interest and taxes, compared with 29% a year earlier.